Types of Planning in Management (ALL TYPES)

Planning Function of Management is the primary and crucial one. There are different Types of Planning in Management. Different authors gave a different Planning Definition in Management.

Planning Function of Management

Planning is one of the crucial functions of management. Because it is the primary step in the management functions by Luther Gulick. You might have great team members and a great leadership quality but, what if your plan is improper.




If your first management function i.e. Planning is improper, what about other managerial functions. So, before going to any other function, your primary function should be proper and clear.


Management is considered to be an art and science both because, science because it follows some developed rules and functions like, Planning to Controlling, and art because it is an art of getting work done through people.




The reason why planning is given more importance than any other function of management is that planning is the base of management if your plan is confusing, we cannot expect success in any other managerial function.


Planning function is not limited to management world, it is all pervasive. Planning plays a crucial role in all the fields, it may be, Education, Hospitals, Hotels, Business etc. 
For example, Students plan for their education and businessmen plans for his business activities.

In simple words, Planning includes:

•  What to do?
•  When to do?
•  How to do?
•  Where to do?
•  Why do?
•  Who is to do it?

If all the above questions are clear in the mind of a manager, here it makes a clear and proper plan in the business organization.

Planning is foremost crucial because the future is uncertain and to avoid those future uncertainties, the manager makes a plan and executes it.


Here, we can see the different Planning Definition in Management by different authors. Every author defined the Planning Function of Management in their own way.




Planning Definition by Theo Haimann,

Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action for further attempting to achieve a consistent co-ordinate structure of operations aimed at the desired results.

Planning Definition by Koontz and O' Donnell,

Planning is an intellectual process, concious determination of course of action, the basing of decision on purpose, facts and considered estimates.

Planning Definition by Alford and Beatt,

Planning is the thinking process, the organized foresight, the vision based on fact and experience that is required for intelligent action.

Planning Definition by Billy E. Goetz,

Planning is fundamentally choosing and a planning problem arises when an alternative course of action is discovered.

From the above definitions by various authors, we can see that every author elaborates the Planning Function of Management from their own point of view.


Planning plays a crucial role in the management world. Because it identifies uncertainties an organization may face and tries to avoid those uncertainties in advance. 




Planning also makes all the activities organized and systematically. So, it becomes easy for the organization in performing various functions effectively and delegation of authority and responsibility can be done after undertaking the planning function.

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Classification of Different Types of Planning in Management

Planning is of various types. Here, we can see the chart and list of classification of different Types of Planning in Management:

1.  Based on Activity Covered
2.  Based on Time Period
3.  Based on Approach
4.  Based on Formulation
5.  Based on the Importance

The elaboration of the above-given chart for Types of Planning is as follows:

1. BASED ON ACTIVITY COVERED

Planning function type, based on activity covered is categorized into two: Corporate Planning & Functional Planning.

➤ Corporate Planning

Corporate planning is the planning type, which helps in creating a long-term plan for improving your business. It also includes the determination of objectives of the company.

Under corporate planning, no department of the company is allowed to have its own independent departmental plan, all department planning is the part of corporate planning.

Strategy plays a key role in the success of corporate planning. Formulation of strategy is the core aspect in a corporate type of planning. Hence, success depends on the success of strategy formulation in this type of planning.

Determination of objectives and the formulation of strategy, both are done against the background of SWOT analysis i.e. Strengths, Weaknesses, Opportunities, & Threats. Corporate Planning has a long-term perspective as compared to Operational Planning.

Here are some steps involved in the process of corporate planning:

1.  Environmental Analysis & Diagnosis
2.  Determining Objectives
3.  Formulation of Strategy
4.  Developing Tactical Plans
5.  Implementing Tactical Plans
6.  Follow-Up-Action

➤ Functional Planning

Functional planning means the medium term planning which is carried out by the middle-level management of a company and at times with the assistance of top-level management.


In an organization, Functional planning is undertaken by various departments to determine their objectives, derived from long term objectives.


Functional planning is made to ensure the smooth working of the organization and taking into consideration the needs of every department.


There are three main activities to be carried out in the functional planning:

1.  Functional Guidance
2.  Goal Setting
3.  Functional Assessments

2. BASED ON TIME PERIOD

Type of Planning - Based on the time period is classified into two main types: Short-term Planning & Long-term Planning.

➤ Short-term Planning

Short-term planning is important in setting smaller objectives or milestones to achieve. The management selects a plan based on the time period after considering the type of objective.

Short-term plans usually show results within a year. The short-term plan is made for a month, quarter, six months or for a year.

➤ Long-term Planning

Long-term planning is considered as a very crucial type of planning based on the time period because long-term planning is important in setting long-term objectives which shows results on a long-term basis.

Long-term planning consists of the overall goal of a company. The long-term plan is set for five or more than five years.

3. BASED ON APPROACH

Type of planning - Based on the approach, is further classified into types, i.e. Proactive Planning & Reactive Planning.

➤ Proactive Planning

Proactive planning is one of the best types of planning which includes anticipation of future outcomes and takes some corrective actions before the happening of events.

Proactive planning is an active, flexible and creative by nature. Proactive planning is very effective nowadays in such a competitive market.

Management must anticipate the future outcome, work accordingly and take actions before happening of events. Proactive planning avoids future uncertainties and increases the growth of the company faster as compared to companies which adopt Reactive type of planning.

➤ Reactive Planning

Reactive planning is the planning type which does not include planning by anticipation of future but it becomes very active during the occurrence of problems.


Reactive planning includes condition-action-rules i.e. if condition then action. The reaction to the problem is based on the type of problem.

4. BASED ON FORMULATION

Planning Types- Based on the formulation, is divided into two types: Formal Planning & Informal Planning.

➤ Formal Planning

The term 'formal' represents to recognized and official. Any plan made formally, it is to be followed or implemented. Formal planning focuses on achieving the organizational goals and plans accordingly.

Formal planning follows a formal hierarchy and it is always carried out in a proper sequence. Formal planning is done on the large scale and the plan is carried out based on logical thinking.

Formal planning is a structured plan which includes a particular procedure to follow and the plan is followed according to the written record.

➤ Informal Planning

The term 'informal' represents to unofficial and friendly. Informal planning is the unstructured type of planning. Informal planning is not in writing.

Generally, informal planning is seen in very small organizations where formal planning may or may not exist. This type of planning is effective only when the number of actions is less and actions have to be taken in a short period of time.

Informal planning does not include any record maintenance for the future purpose because it is an unofficial type of planning.

5. BASED ON THE IMPORTANCE

Based on the importance, Types of Planning is sub-categorized into two: Strategic Planning & Operational Planning.

➤ Strategic Planning

Strategic planning includes the process of developing strategies to reach the desired objective. The strategic plan sets the long-term direction of the company.

It sets the direction in which the company wants to proceed in the future. Strategic plans are made for more than more than one year but, in most cases, it ranges between 3 to 5 years of time period.

Strategic plans are developed by the top-level management of a company and medium-level and bottom-level management follows that strategic plan. There eight main types of strategic planning models below:

1.  Balanced Scorecard
2.  SWOT Analysis
3.  Strategy Map
4.  Gap Planning
5.  PEST Model
6.  Blue Ocean Strategy
7.  Porter's Five Forces
8.  VRIO Framework

➤ Operational Planning

Operational planning is also known as tactical planning. Operational planning only deals with current activities in the organization. This type of planning is the responsibility of bottom-level management.

Operational or Tactical planning is conducted by supervisors, foreman etc. The time range in this type of planning is short, generally, it ranges between one week to one year.

Operational planning is basically concerned with the efficient use of resources and it also ensures proper implementation of action so that it becomes easier in achieving objectives.

Conclusion

Here, we have seen ten different Types of Planning in Management. These planning types are divided based on activity covered, time period, approach, formulation and based on the importance.

Each and every Planning Definition in Management shows a different view/opinion by different authors. Opinions might be different but every definition gives the importance of planning in management.

Each of these Types of Planning in Management has its own importance in the business organization, just like all the types of strategic planning models are important in strategic planning type.

Thus, we can say that the Planning Function of Management is an utmost important function in management and in this article we have seen all types of planning in detail.

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